2007 Regular Session
To: Ways and Means
By: Representative McBride
AN ACT TO BE KNOWN AS THE UNAUTHORIZED SUBSTANCE TAX ACT; TO PROVIDE DEFINITIONS; TO LEVY AN EXCISE TAX ON UNAUTHORIZED SUBSTANCES; TO PROVIDE EXEMPTIONS; TO PROVIDE FOR ISSUANCE OF TAX STAMPS; TO REQUIRE PAYMENT OF THE TAX; TO AUTHORIZE COLLECTION OF PENALTIES AND INTEREST; TO PROVIDE FOR CONFIDENTIALITY AND IMMUNITY; TO CREATE A SPECIAL FUND AND PROVIDE FOR REMITTANCE OF THE TAX; TO PROHIBIT IMMUNITY FROM CRIMINAL PROSECUTION; TO AUTHORIZE PROMULGATION OF RULES AND REGULATIONS; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. This act shall be known and may be cited as the Unauthorized Substance Tax Act.
SECTION 2. The purpose of this act is to levy an excise tax to generate revenue for state and local law enforcement agencies for use by those agencies to investigate, combat, prevent and reduce drug crimes, and for the State General Fund. Nothing in this act may in any manner provide immunity from criminal prosecution for a person who possesses an illegal substance.
SECTION 3. As used in this act, unless the context clearly requires otherwise:
(a) "Commissioner" means the Commissioner of the State Tax Commission.
(b) "Controlled substance" means a controlled substance as defined in Section 41-29-105(f), and not included in "low-street-value drugs."
(c) "Dealer" means any of the following:
(i) A person who actually or constructively possesses more than forty-two and one-half (42-1/2) grams of marijuana, seven (7) or more grams of any other unauthorized substance that is sold by weight, or ten (10) or more dosage units of any other unauthorized substance that is not sold by weight.
(ii) A person who, in violation of Title 67, Chapter 1 of the Mississippi Code of 1972, possesses an illicit alcoholic beverage for sale.
(d) "Illicit alcoholic beverage" means an alcoholic beverage, as defined in Section 67-1-5, not authorized by Title 67, Chapter 1 of the Mississippi Code of 1972. "Illicit alcoholic beverage" includes, but is not limited to, the products known as "bootleg liquor," "moonshine," "nontax-paid liquor," and "white liquor."
(e) "Local law enforcement agency" means a municipal police department or a sheriff's office.
(f) "Low-street-value drug" means any of the following controlled substances:
(i) An anabolic steroid described in Section 41-29-117(A)(f).
(ii) A depressant described in Section 41-29-119(A)(b).
(iii) A hallucinogenic substance described in Section 41-29-113(c).
(iv) A stimulant described in Section 41-29-119(A)(d).
(v) A controlled substance described in Section 41-29-121.
(g) "Marijuana" means "marihuana" as defined in Section 41-29-105(r).
(h) "Person" means "person" as defined in Section 41-29-105(w).
(i) "State law enforcement agency" means the Department of Public Safety, Department of Transportation enforcement officers, Department of Wildlife, Fisheries and Parks, Attorney General special investigators and Public Integrity Division special investigators, Alcohol Beverage Control Division enforcement officers, Department of Corrections officers, Department of Marine Resources enforcement officers, and any other state agency, force, department, or unit responsible for enforcing criminal laws of the state.
(j) "Unauthorized substance" means a controlled substance, a low-street-value drug or an illicit alcoholic beverage.
SECTION 4. (1) An excise tax is levied on unauthorized substances possessed, either actually or constructively, by dealers at the following rates:
(a) At the rate of Forty Cents (40¢) for each gram, or fraction thereof, of harvested marijuana stems and stalks that have been separated from and are not mixed with any other parts of the marijuana plant.
(b) At the rate of Three Dollars and Fifty Cents ($3.50) for each gram, or fraction thereof, of marijuana, other than separated stems and stalks taxed under paragraph (a) of this subsection.
(c) At the rate of Fifty Dollars ($50.00) for each gram, or fraction thereof, of cocaine.
(d) At the rate of Two Hundred Dollars ($200.00) for each gram, or fraction thereof, of any other controlled substance or low-street-value drug that is sold by weight.
(e) At the rate of Fifty Dollars ($50.00) for each ten (10) dosage units, or fraction thereof, of any low-street-value drug that is not sold by weight.
(f) At the rate of Two Hundred Dollars ($200.00) for each ten (10) dosage units, or fraction thereof, of any other controlled substance that is not sold by weight.
(2) A quantity of marijuana or other unauthorized substance is measured by the weight of the substance whether pure or impure or dilute, or by the number of dosage units in the dealer's possession when the substance is not sold by weight, in the dealer's possession. A quantity of an unauthorized substance is dilute if it consists of a detectable quantity of pure controlled substance and any excipients or fillers.
(3) An excise tax is levied on illicit alcoholic beverages possessed by a dealer at the following rates:
(a) At the rate of Thirty-one Dollars and Seventy Cents ($31.70) for each gallon, or fraction thereof, of illicit alcoholic beverages sold by the drink.
(b) At the rate of Twelve Dollars and Eighty Cents ($12.80) for each gallon, or fraction thereof, of illicit alcoholic beverages not sold by the drink.
SECTION 5. (1) The tax levied by this act does not apply to a substance in the possession of a dealer who is authorized by law to possess the substance. This exemption applies only during the time the dealer's possession of the substance is authorized by law.
(2) The tax levied by this act does not apply to the following marijuana:
(a) Harvested mature marijuana stalks when separated from and not mixed with any parts of the marijuana plant;
(b) Fiber or any other product of marijuana stalks described in paragraph (a) of this subsection, except resin extracted from the stalks;
(c) Marijuana seeds that have been sterilized and are incapable of germination;
(d) Roots of the marijuana plant.
SECTION 6. (1) The commissioner shall issue stamps to affix to unauthorized substances to indicate payment of the tax required by this act. Dealers shall report the taxes payable under this act at the time and on the form prescribed by the commissioner. Dealers are not required to give their name, address, social security number, or other identifying information on the form. Upon payment of the tax, the commissioner shall issue stamps in an amount equal to the amount of the tax paid. Taxes may be paid and stamps may be issued either by mail or in person.
(2) Every local law enforcement agency and every state law enforcement agency must report to the State Tax Commission within forty-eight (48) hours after seizing an unauthorized substance, or making an arrest of an individual in possession of an unauthorized substance, listed in this subsection upon which a stamp has not been affixed. The report must be in the manner prescribed by the commissioner and must include the time and place of the arrest or seizure, the amount, location, and kind of substance, the identification of any individual in possession of the substance and the individual's social security number, and any other information prescribed by the commissioner. The report must be made when the arrest or seizure involves any of the following unauthorized substances upon which a stamp has not been affixed as required by this act:
(a) More than forty-two and one-half (42-1/2) grams of marijuana.
(b) Any illicit alcoholic beverage.
(c) Seven (7) or more grams of any other unauthorized substance that is sold by weight.
(d) Ten (10) or more dosage units of any other unauthorized substance that is not sold by weight.
SECTION 7. The tax imposed by this act is payable by any dealer who actually or constructively possesses an unauthorized substance in this state upon which the tax has not been paid, as evidenced by a stamp issued by the commissioner. The tax is payable within forty-eight (48) hours after the dealer acquires actual or constructive possession of a nontax paid unauthorized substance, exclusive of Saturdays, Sundays, and legal holidays of this state, in which case the tax is payable on the next working day. If the tax is not paid within forty-eight (48) hours, the tax will become delinquent and shall accrue penalty and interest under the statutory provisions and regulations of the State Tax Commission. Upon payment of the tax, the dealer shall permanently affix the appropriate stamps to the unauthorized substance. Once the tax due on an unauthorized substance has been paid, no additional tax is due under this act even though the unauthorized substance may be handled by other dealers. If a dealer is found in possession of a substance taxable under this part that does not have the appropriate tax stamp affixed, it shall be presumed the dealer has been in possession of the substance for longer than forty-eight (48) hours, exclusive of Saturdays, Sundays and legal holidays of this state.
SECTION 8. Notwithstanding any other provision of law, an assessment against a dealer who possesses an unauthorized substance to which a stamp has not been affixed as required by this act shall be made as provided in this section. The commissioner shall immediately assess the tax, applicable penalty, and interest based on any information brought to the attention of the commissioner, or the commissioner's duly authorized assistants, that a person is liable for unpaid tax under this act. The tax shall be assessed in the same manner as any other tax assessment, except when the provisions of this act specify otherwise. The commissioner shall notify the dealer in writing of the amount of the tax, penalty, and interest due, and demand its immediate payment. The notice of assessment and demand for payment shall be either mailed to the dealer at the dealer's last known address or served on the dealer in person. If the dealer does not pay the tax, penalty, and interest immediately upon receipt of the notice and demand, the commissioner shall collect the assessment, including penalty and interest, under the procedure set forth in Sections 27-3-69 and 27-3-81, unless the dealer files with the commissioner sufficient security in the amount of the assessment, including penalty and interest. Unless security is provided, the assessment shall be deemed a jeopardy assessment, and the commissioner shall use all means available to collect the assessment from any property in which the dealer has a legal, equitable, or beneficial interest. The dealer may seek review of the assessment as provided in Section 27-3-29 except to the extent those provisions are modified by this act.
SECTION 9. Notwithstanding any other provision of law, information obtained under this act is confidential and, unless independently obtained, may not be used in a criminal prosecution other than a prosecution for a violation of this act. Stamps issued under this act may not be used in a criminal prosecution other than a prosecution for a violation of this act. This section does not prohibit the commissioner from publishing statistics that do not disclose the identity of dealers or the contents of particular returns or reports.
SECTION 10. (1) There is created in the State Treasury a special fund to be known as the Unauthorized Substances Tax Fund. The purpose of the fund shall be to provide funding for the purposes set forth in this act. The fund shall consist of monies deposited under this act and the interest accruing to the fund. Any interest earned on monies in the fund shall be credited to the fund, and any unexpended monies remaining in the fund at the end of a fiscal year shall not lapse into the State General Fund.
(2) The commissioner shall deposit the proceeds of the tax levied by this act into the special fund until the tax proceeds are unencumbered. When the tax proceeds become unencumbered, the commissioner shall remit the unencumbered tax proceeds as provided in this section on a quarterly or more frequent basis. Tax proceeds are unencumbered when:
(a) The tax has been paid and the collection process completed; and
(b) (i) The taxpayer has no current right to file a refund claim, and the paid tax is not the subject of any pending lawsuit for the recovery of that tax; or
(ii) The time for the taxpayer to file suit has expired.
(3) The commissioner shall first apply the unencumbered tax proceeds to the costs of storing and disposing of the assets seized in payment of the assessment under this act, which costs shall be added to and become part of the assessment. From the remaining proceeds, the commissioner shall remit seventy-five percent (75%) of the unencumbered tax proceeds that were collected by assessment to the state or local law enforcement agency that conducted the investigation of a dealer that led to the assessment. Those proceeds are to be used by the agency solely for the purpose of investigating, combating, preventing, and reducing drug crimes. If more than one (1) state or local law enforcement agency conducted the investigation, the commissioner shall determine the equitable share for each agency based on the contribution each agency made to the investigation. The commissioner's determination of the equitable share for each agency shall be final, and shall not be subject to review in an administrative or judicial proceeding. The commissioner shall credit the remaining unencumbered tax proceeds to the State General Fund.
SECTION 11. The provisions of this act shall not be construed to confer any immunity from criminal prosecution or conviction for a violation of the Uniform Controlled Substances Law (Section 41-29-101 et seq.) or the Alcoholic Beverage Control Law (Section 67-1-1 et seq.) upon any person who voluntarily pays the tax imposed by this part or who otherwise complies with the provisions of this act.
SECTION 12. The commissioner shall have the authority to promulgate rules and regulations in accordance with the Mississippi Administrative Procedures Law to implement, administer and enforce the provisions of this act.
SECTION 13. This act shall take effect and be in force from and after July 1, 2007.